The story begins in 2016, when Vincent Bolloré decided that he wanted his French company, Vivendi, to rescue Silvio Berlusconi’s Italy-based Mediaset Premium, a pay-TV service that was in dire financial straits.

Among other companies, Vivendi owns Canal Plus, a European pioneer of satellite TV and pay-TV services, and in 2016, Bolloré planned to return to the Italian TV market — he’d previously owned Italy’s satellite TV service Tele Piú in 1996 (before it was sold to 21st Century Fox and was renamed Sky Italia) — by having him become a shareholder in Mediaset’s Premium, which was Sky’s biggest competitor in Italy.

Then, like today, the goal of many major media groups in Europe was to create alliances in order to build a large pan-European content platform so that it might compete with international streaming players such as Netflix, Amazon Prime, and Disney Plus, among others.

In 2018, however, Vivendi suddenly reneged on the deal with Premium (which at the time was a public company, but controlled by Mediaset) causing the de facto closure of the service. Premium’s operation was donated to Sky, while the brand remained with Mediaset.

At that point, the expansionist aims of Bolloré in Italy emerged in another way. Abandoning Premium to its fate, he turned directly to Mediaset, with the goal of him becoming its majority shareholder. Within a few months his Vivendi bought floating shares of Mediaset on the Borsa di Milano stock exchange, soon reaching up to 29.9 percent ownership, putting the controlling shareholder, Silvio Berlusconi’s Fininvest, in serious difficulty.

After the initial shock, Fininvest reacted fiercely, initiating legal action to prevent Vivendi from buying more shares, and strengthening its relative majority in Mediaset by attaining just under 50 percent control (partly accomplished by placing shares in friendly shareholders’ hands since Mediaset couldn’t directly buy that much without activating a costly stock buyout offer).

Meanwhile, Vivendi became the largest shareholder in Italy’s major national telco, TIM-Telecom Italia (with 23 percent ownership). Alarmed, the telco’s other Italian shareholders formed an alliance with U.S.-based Elliott Ma-nagement and got loans from the Cassa Depositi e Prestiti (a financial institution 83 percent-owned by the Italian state) to increase ownership. These actions froze Vivendi’s control and got the French out from a management position. And, in an effort to further dilute Vivendi’s influence, the Italian TIM shareholders negotiated a merger (to create an Italian single telecommunications network) with Open Fiber, a company that is equally owned by Cassa Depositi e Prestiti and ENEL, the state’s energy group.

Vivendi’s strong presence in Italy became of great concern to Italian politicians who debated if it was logical to entrust the main assets of Italian communication, such as TV networks and a telco, to Bolloré. The answer, of course, was “no,” and under a 2004 law (the so-called Gasparri Law, named after Maurizio Gasparri, the Minister of Communications under the Berlusconi go-vernment), the Italian Communications Authority (AGCOM) got involved to remove Vivendi from its dominant positions.

With the AGCOM ruling, Vivendi was forced to entrust a large part of its shares in Mediaset to a blind trust (Simon Fiduciaria), thus preventing it from influencing important corporate decisions.

With this move we arrive at the second half of 2020 in the midst of a pandemic, when the European Union declared the provision of the Gasparri Law (under which AGCOM acted) to be “inadequate,” going on to say that telephone and TV companies were consolidating in other E.U. countries, and Italy shouldn’t be treated as a separate case.

With the E.U. in effect abrogating the Gasparri Law, and annulling AGCOM’s decision on the Vivendi-Mediaset case (a decision that was also nixed by a court of the Lazio Region), the blind trust Simon Fiduciaria was able to leave the scene, and Vivendi re-took control of the entire 29.9 percent shares of Mediaset.

But as happens very often in Italy, what comes out the front door can come back through the side window, and thus, a government executive order to combat the COVID-19 emergency had an added amendment (dubbed the “save Mediaset” amendment), which established that AGCOM could still reaffirm its original provision on the Vivendi-Mediaset case.

And so, we now arrive in the present day, with the E.U. challenging the “save Mediaset” provision (even though it is still in force), while Berlusconi’s companies continue their civil and criminal court cases against Vivendi, claiming that the French group did not abide by the law, first with Premium and later with Mediaset.

It is clear that, ultimately, the real fight is for who will become the major European streaming player, and Mediaset has been working for some time now on the creation of Media For Europe (MFE), a pan-European TV group that Bolloré opposes, and which would initially group TV networks in Italy, Spain, and Germany.

For this project, and through a series of stock acquisitions on the open market, Mediaset became the major shareholder of the German television group ProsiebenSat1, even if it is still excluded from its management. Then there is the major ownership (but not control) of Spain’s Telecinco TV network. In Spain, Vivendi managed to legally stop the takeover of Telecinco by Mediaset (even though Bolloré has no stake in Telecinco), blocking or at least postponing the creation of MFE by Mediaset.

Conversely, Mediaset’s strategy worries Vi-vendi. We are talking about a clash between two strong personalities — Berlusconi and Bolloré — neither of whom want to cede control of such an important commercial initiative on the European media market. They are still playing the chess game and the outcome is still unpredictable. Meanwhile, Mediaset has already decided where MFE will be based, choosing Amsterdam, in the Netherlands, for tax opportunities.

(By Enzo Chiarullo and Mauro Roffi)

Audio Version (a DV Works service)

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